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South Africa’s gold mining index fell the most in more than six months after the metal retreated for a second day as the dollar strengthened on signs the Federal Reserve may refrain from providing more stimulus for the U.S. economy.
The FTSE/JSE Africa Gold Mining Index (JGOLD) dropped 4.5 percent, the most since Sept. 23, to 2298.10, the lowest since July, as of the 5 p.m. close in Johannesburg. AngloGold Ashanti Ltd. (ANG), Africa’s biggest producer of the metal, fell 4.2 percent to 269.50 rand, the weakest in more than two years. Gold Fields Ltd. (GFI), the world’s fourth-biggest gold producer, dropped 5 percent to 100.73 rand, the lowest since July 11.
Gold futures for June delivery slumped 2.9 percent to $1,623.40 an ounce at 10:09 a.m. on the Comex in New York, the biggest drop for a most-active contract since March 14. Earlier, prices plunged to $1,618.80, the lowest since Jan. 10. Bullion and the greenback tend to move inversely. Gold also declined as jewelers in India extended a nationwide strike for a 19th day today to protest a tax on non-branded ornaments.
AngloGold and Gold Fields’ slump pushed them into “oversold territory,” Ferdi Heyneke, a trader at Afrifocus Securities, said by phone today. “On a technical basis it does look like they are very oversold at the moment, but they are not getting any momentum on the rallies.”
AngloGold’s 14-day relative strength index, which shows how rapidly prices advanced or dropped during a specified time period, reached 20.7 today, the lowest in almost two years. A reading of 30 or below signals to some investors that shares are set to increase. Gold Field’s RSI dropped to 24.1.
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